DEPOSITED BY THE UNITED STATES OF AMERICA 3 HIGHLIGHTS OF THIS ISSUE-Continued from page 1 EXCISE TAXES: A transfer agent is not liable for the documentary stamp Rev. Rul. 59-3, Information and lists relating to the retailers tax on lug- For purposes of the retailers tax, sales made in Louisi- page 21. Rev. Rul. 59-4, page 14. Rev. Rul. 59-10, page 16. Rev. Rul. 59-11, page 18. The manufacturers tax on automobile parts or acces- The cabaret tax will not apply beginning January 1, TOBACCO TAX: page 19. Announcement 59-4, page 25. The regulations are amended to provide that taxpay. T. D. 6341, page 22. INTRODUCTION-(Continued from page 2) personnel of the Service and others concerned must consider the effect of subsequent legislation, regulations, court decisions, rulings and procedures. Each published ruling is designated as a "Revenue Ruling," and each published procedure is designated as a "Revenue Procedure." These should be cited by reference to the year of issuance and the Bulletin and page where reported. Thus, Revenue Ruling No. 11 for 1958, which is reported on page 8 of Bulletin No. 2 for 1958, should be cited as "Rev. Rul. 58-11, I. R. B. 1958-2, 8," until it appears in the Cumulative Bulletin, when it should be cited as "Rev. Rul. 58-11, C. B. 1958-1, -." Similarly, Revenue Procedure No. 1 for 1958, which is reported on page 15 of Bulletin No. 3 for 1958, should be cited as "Rev. Proc. 58-1, I. R. B. 1958-3, 15," until such time as it appears in the Cumulative Bulletin. Revenue Rulings are keyed to the applicable sections of the Internal Revenue Code and regulations. The Bulletin is published weekly, and the contents thereof are consolidated at least semiannually into a permanent Cumulative Bulletin. Persons so desiring may subscribe to the Bulletin through the Superintendent of Documents, as indicated below. The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C. Price 20 cents (single copy). Subscription price: $6.00 a year; $2.75 additional for foreign mailing. FOREWORD The Internal Revenue Bulletin is prepared in six parts, as follows: I. Part I includes rulings and decisions which are based on the application of provisions of the Internal Revenue Code of 1954 and, unless otherwise stated in the ruling or decision, are published without consideration as to any application of the provisions of the Internal Revenue Code of 1939 or other related public laws. II. Part II includes rulings and decisions which are based on the application of the Internal Revenue Code of 1939, the Federal Firearms Act, and other public laws except those pertaining to the various alcohol taxes; and, unless otherwise noted therein, they are published without consideration as to any application of the provisions of the Internal Revenue Code of 1954. Part II is subdivided into three subparts according to matters issued under the Internal Revenue Code of 1939 (Subpart A), the Federal Firearms Act (Subpart B), and other public laws (Subpart C). III. Part III contains rulings and decisions pertaining to the various alcohol taxes. This part is subdivided into four subparts according to matters issued under the Internal Revenue Code of 1954 (Subpart A), the Internal Revenue Code of 1939 (Subpart B), the Federal Alcohol Administration Act (Subpart C), and other public laws (Subpart D). IV. Part IV contains treaties and tax legislation, including related committee and Conference Reports. This part is subdivided into three subparts according to tax conventions, Treasury Decisions and Revenue Rulings issued with respect thereto (Subpart A), legislation (Subpart B), and Committee Reports (Subpart C). House, Senate and Conference Committee Reports printed in the Bulletin do not include the portion entitled "Changes in Existing Law." V. Part V is devoted to administrative, procedural and miscellaneous matters. VI. Part VI includes general announcements which are deemed to be of interest to the general public. With the exception of the disbarment list included in this part, none of the other announcements will be consolidated in the Cumulative Bulletin. The Highlights of this Bulletin include a reference to each item published in the Bulletin. Because these are grouped according to the type of tax involved, the Highlights for a particular issue serve as an index to matters published therein. The Bulletin service carries a cumulative index on a monthly basis. That index appears in the first Bulletin for each month and indexes matters published during the preceding month. These monthly indexes are cumulated on a quarterly and semiannual basis, and the indexes so cumulated are published in the first Bulletin of the succeeding quarterly period, respectively. PART I RULINGS AND DECISIONS UNDER THE INTERNAL REVENUE CODE OF 1954 Rulings and decisions published in Part I of the Internal Revenue Bulletin are based on the application of provisions of the Internal Revenue Code of 1954 and, unless otherwise stated in the rulings or decisions, are published without consideration as to any application of the provisions of the Internal Revenue Code of 1939 or related public laws. SECTION 61.-GROSS INCOME DEFINED 26 CFR 1.61-1: Gross income. (Also Section 162; 1.162-1.) Rev. Rul. 59-5 Unemployment benefits derived from a private fund, as distinguished from a union established fund, established and contributed to by members who receive the benefits of such fund, constitute gross income to the member when received to the extent they exceed the amount which the member personally contributed to the fund. Contributions to the fund are not deductible, for Federal income tax purposes, by the contributors. Advice has been requested as to the treatment, for Federal income tax purposes, of contributions to and benefits derived from a private unemployment fund. In the instant case, a private unemployment fund was established. Membership in the fund is limited to individuals engaged in a particular type of occupation. However, the fund was not established by a trade union. Participating members pay certain amounts into the fund, depending on the type of membership desired, and in the event of unemployment receive specified cash payments depending on their class of membership. Section 61 (a) of the Internal Revenue Code of 1954 provides, in part, that "except as otherwise provided in this subtitle, gross income means all income from whatever source derived, ***" In Commissioner v. Glenshaw Glass Company et al., 348 U. S. 426, Ct. D. 1783, C. B. 1955-1, 207, the Supreme Court of the United States in referring to the broad scope of section 22(a) of the Internal Revenue Code of 1939, which is substantially similar to section 61 of the 1954 Code, pointed out that Congress applied no limitations as to the source of taxable receipts, nor restrictive labels as to their nature. Revenue Ruling 57-383, C. B. 1957-2, 44, involving a situation similar to that in the present case, holds that unemployment benefits derived from a union established fund, contributed to by members of a trade union, constitute gross income to the recipient to the extent they exceed contributions made by him to the fund, and that amounts paid into the fund by members are not deductible. In the absence of any provision in the Code which expressly excludes unemployment benefits derived from private sources from Federal income taxation, the rationale of the above-cited case and Revenue Ruling is applicable in the instant case. In the instant case, each member must contribute to the fund an amount in relation to the benefits which he desires ultimately to receive. Therefore, the benefits, when received, do not constitute amounts gratuitously paid or received so as to be considered gifts within the meaning of section 102 of the Code. See Revenue Ruling 54-190, C. B. 1954-1, 46. Accordingly, it is held that unemployment benefits derived from a private fund, as distinguished from a union established fund, established and contributed to by members who receive the benefits of such fund, constitute gross income to the member when received to the extent they exceed the amount which the member personally contributed to the fund. Further, contributions to the fund are not deductible, for Federal income tax purposes, by the contributors. SECTION 162.-TRADE OR BUSINESS EXPENSES 26 CFR 1.162-1. Business expenses. Contributions to a privately established unemployment fund. See Rev. Rul. 59-5, page 6. SECTION 501.-EXEMPTION FROM TAX ON CORPORATIONS, CERTAIN TRUSTS, ETC. 26 CFR 1.501 (c) (5)-1: Labor, agricultural, and horticultural organizations. Rev. Rul. 59-6 An apprenticeship committee organized primarily to establish standards of employment concerning apprentices in various skilled crafts, determine the qualifications necessary to become a journeyman, aid in adjusting and settling disputes between the employer and the apprentice, and also cooperate with the local board of education in establishing supplementary classroom instruction pertaining to the apprentice's vocation, is exempt from taxation as a labor organization under section 501 (c) (5) of the Internal Revenue Code of 1954. Advice has been requested whether a committee organized for the purpose of supervising the enforcement of apprenticeship standards in various skilled crafts is exempt from taxation under the provisions of section 501 (c) (5) of the Internal Revenue Code of 1954. An apprenticeship committee was organized for the purpose of establishing standards of employment concerning apprentices in various skilled crafts. The committee establishes standards as to the appropriate wages to be paid the apprentices, the amount of time to be spent under a journeyman in learning a particular phase of work, and the number of apprentices who shall be employed in a |